The Australian share market has historically delivered a return of around 10% per annum.
While that is a great return, there are some ASX stocks out there with the potential to outperform this.
In fact, Bell Potter has just tipped one ASX financial stock to deliver a return of almost 20% over the next 12 months.
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Which ASX financial stock?
The stock that has caught the eye of the broker is Cuscal Ltd (ASX: CCL).
It is an authorised deposit-taking institution that provides B2B payments and regulated data services in Australia.
Bell Potter notes that its offering involves facilitation and connectivity across the value chain, with core capabilities in real-time payments, card issuing and acquiring.
Bell Potter has been looking at recent data and believes the company is positioned to deliver on its guidance in FY 2026. It said:
We expect the February guidance to remain in reach, with 45% of profits expected to be realised in 2H26. Guidance reflects lower net interest income, no cost synergies and high-single-digit volume growth, driving mid-teens earnings growth.
The broker also believes that the ASX financial stock will report double-digit volume growth for the year. It adds:
We expect total volume growth of +11% YOY, enhanced by acquiring +17% YOY and payments +10% YOY. Debit card transactions are undisturbed, with consistent +5% YOY growth from larger card issuers. That is outperformance compared with the pcp. The RBA has also indicated the share of payments made by card has stabilised, with online growing share and mobile wallets gaining. We see this as another angle to guidance and future runway.
Device-not-present debit card transactions are up +10% YOY with mobile wallets growing +60% YOY. Total mobile wallet transactions are up +17% YOY and PayID push payments are still most used for transfers to families and friends, while awareness for PayTo pull payments is low with 5% use from consumers in the past year. We think this will drive volume growth closer to low-double-digits.
Strong potential returns
According to the note, Bell Potter has retained its buy rating and $5.80 price target on the company's shares.
Based on its current share price of $4.94, this implies potential upside of approximately 17.5% over the next 12 months.
In addition, a fully franked 2% dividend yield is expected over the period, boosting the total potential return to approximately 19.5%.
Speaking about its recommendation, the broker said:
We reiterate our earnings, which are consistent with the February guidance. Our Buy rating and target price are unchanged. CCL is well positioned to benefit from its end-to-end payment capabilities and client portfolio. There is emerging upside with New Zealand land and expand being heavy on in-store transactions. The story of winning clients and cross-selling services would be energised. CCL continues to screen well.
